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under section 6653(b)(1) and (2) and for substantial
understatement of tax under section 6661.1
Petitioner was convicted of various crimes related to bank
loans he obtained and filing false tax returns for 1985 and 1986.
The issues for decision are:
1. Whether petitioner is collaterally estopped from
disputing that he failed to report income in 1985. We hold that
he is to the extent discussed herein.
2. Whether the statute of limitations bars assessment of
tax for 1985. We hold that it does not.
3. Whether, as respondent contends, petitioner’s Federal
income tax deficiency for 1985 is $673,145. We hold that it is.
4. Whether petitioner is liable for the addition to tax
for fraud for 1985. We hold that he is not.
5. Whether petitioner is liable for an addition to tax for
substantial understatement for 1985. We hold that he is.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioner
Petitioner was incarcerated in Seagoville, Texas, when the
petition was filed. His permanent residence was in Jacksonville,
Florida, before and after his incarceration.
1 Unless otherwise indicated, section references are to
sections of the Internal Revenue Code as applied in 1985. Rule
references are to the Tax Court Rules of Practice and Procedure.
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